AZ foreclosure laws

Don't give up....! If foreclosure has not yet been started, there may be help on the way. There are some people who understand that, despite all the self-prmotion of the mortgage lending and servicing industry, claiming that they are working hard to save borrowers from foreclosure, it is completely untrue. They are doing little or nothing, and frustrating people to tears in the meatime, who keep sending them what they ask for, and getting nowhere.

Some members of Congress get it. As a result, there are some legislative changes in the works that may be passed very soon (first quarter of 2009), when thenew Congress and new Presidential Administration take over. if these things pass, they should provide critical new tools to people in danger of foreclosure, or actually in foreclosure.

Since I am now focusing my entire practice on foreclosure defense, I keep my eye constantly on these developments, and will post here when these changes happen.

Since your lenders have not started foreclosure, there may be time for these changes to help you.

THIS ANSWER DOES NOT CONSTITUTE LEGAL ADVICE OR FORM AN ATTORNEY-CLIENT RELATIONSHIP.

Assuming AZ law applies (check your loan docs and note) and assuming your home is on 2.5 acres or less, then when a lender forecloses at a trustee's sale, it can't come after the borrower for any deficiency. However, if the 2nd loan is not a purchase money loan, then it can come after the borrower for the debt after the first loan wipes outs its lien at the foreclosure sale. A purchase money 2nd loan would, however, be prevented from suing on the debt after a foreclosure by the 1st lender.

Short sales don't work well when their are 2 lenders since both need to agree on the allocation of the proceeds and the 1st will almost always want to be paid all proceeds up to its loan amount. You might reconsider seeking a loan modification on your mortgage (1st). Even though they said no before, situations change and lenders can change their mind. You can also hire a lawyer (such as our firm) to handle the modification. Note that many lenders won't consider a modification unless you are behind on your payments although I wouldn't encourage you to get behind.